iTunes and the TV Revolution

Apple is in talks with major television stations to better try and monetize content through iTunes. No doubt this will be a series of on-going talks. There are lots of very, very, very good reasons why dropping prices would be an excellent idea, and you've got to wonder what planet these television executives are living on. Reading some of the commentary makes you perhaps think it's a planet that doesn't have an internet.

The Music industry was first to suck eggs on this issue for two reasons. Firstly, the CD was horrendously overpriced so people didn't want to pay for it. Secondly the size of digital music downloads is a great deal smaller so it makes them easier to download, even with a relatively tiny internet connection. The first point is different for television because the content is also available for free. The second issue is becoming less of a problem because people are generally acquiring more bandwidth to their homes.

And let's face reality, this is the future. The internet is only 20 years old and people are already using it as a key information, entertainment and communication resource. Want to bet that in 10 years 50% of the population won't be using the internet for all forms of entertainment and communication? I won't take that bet. And this is really how the 'television' industry needs to start thinking.

The 'television' set is morphing. Very soon it's going to (obviously) be a flat screen internet appliance. The winner in this new market is going to be the company that delivers the content to this device. The traditional television executives have already missed this boat. Steve Jobs is the captain, and this call from Apple isn't 'Lower your prices!' ... this is the call for 'All aboard!'. Apple is making it easy for traditional television producers to migrate to this wonderful new platform which will allow them to globally monetize their content.

And what response is Apple getting? Not "Thank you Apple, please make us squillions of dollars", nope the response is "We'll think about it". Hmmm, think about staying in business for the next 20 years?

Here's a hint guys. The music industry is being cannibalized by independent content producers, what do you think is going to happen to the 'television' industry?

“If you took five things at Wal-Mart and sold them for a nickel, they’d sell really well, because they’d stand out. But if you took everything in the store and made it a nickel, nothing stands out anymore. Essentially all you’ve done is lowered the value of your content,”

A perfect quote. So if (for example) Australian or Canadian television producers start selling their content for a nickel on iTunes, they'd really stand out? The Wal-Mart example assumes one very key factor, you can only buy things from Wal-Mart. The traditional US television networks aren't the only content producers in the entire world and this will become more obvious in the coming years. If you don't lower the value of the content, the market will lower it for you.

Television is no longer a monopoly. A broadcast license from the FCC doesn't mean a damned thing on a global free-for-all communications network. Right now, the traditional television content producers have a huge head start on the competition. To maintain the existing content monopoly, the content must quickly become pervasive for consumers. IMO you shouldn't just be lowering prices, you should be figuring out creative ways to get an entirely new generation addicted to your shows. Because there's a whole generation coming that won't even understand the concept of scheduled broadcast television.

And this is where the content industry (not music, not television, not books, not movies but all content) is failing time and again. A 12 year old child can produce and sell music on the same scale as a billion dollar multinational corporation. Similar resources are becoming more and more accessible for movies and serials programming. If you don't compete you won't have any chance of winning.